Asian Shares Advance On China Optimism

Asian stocks ended broadly higher on Monday, as investors reacted to reports of a possible U.S. tariff cut on China’s goods, loosening of Covid-19 restrictions in Beijing and improved Caixin Services PMI data for May from China.

China’s Shanghai Composite Index rallied 1.3 percent to 3,236.37 after a private business survey showed China’s services activity contracted for the third month in a row in May but pointed to a slow recovery in the world’s second-largest economy.

Hong Kong’s Hang Seng Index soared 2.7 percent to 21,653.90 as anti-virus controls on Shanghai and other major cities were lifted.

Japan’s Nikkei Index rose 0.6 percent to 27,915.89, marking a two-month closing high. Energy stocks topped the gainers list as oil prices climbed after Saudi Arabia raised prices sharply for its crude sales in July.

Idemitsu Kosan surged 5.4 percent and ENEOS jumped 4.8 percent. Airline ANA Holdings added 2.9 percent and travel agent H.I.S. gained 3.3 percent, buoyed by reports that the Japanese government was considering restarting its “Go To Travel” subsidy program as early as this month.

Markets in South Korea and New Zealand were shut for holidays. Australian stocks ended lower as investors looked ahead to the RBA’s policy meeting on Tuesday, when the central bank is expected to raise the cash rate by 25-40 basis points.

The benchmark S&P/ASX 200 Index dropped 0.5 percent to 7,206.30, while the broader All Ordinaries Index ended 0.5 percent lower at 7,433.10. Tech stocks paced the declines, with Block losing 3.2 percent.

U.S. stocks fell sharply on Friday to close the week lower as a stronger-than-expected jobs report reversed any hopes that the Fed would consider a pause in rate hikes after the June/July increases.

Data showed that non-farm payroll employment jumped by 390,000 jobs in May after surging by an upwardly revised 436,000 jobs in April. Economists had expected employment to increase by about 325,000 jobs. The unemployment rate remained unchanged at 3.6 percent.

The tech-heavy Nasdaq Composite plunged 2.5 percent, while the S&P 500 shed 1.6 percent and the Dow lost 1.1 percent.

Source: Read Full Article